The Cypress Banking Crisis

Executive Summary

  • The Cypress banking crisis made account holders more responsible than banks for funding the bail out or bail in.

Introduction

Cypress prevented its citizens from withdrawing their money. Many depositors had their accounts converted to bank stock, which subsequently devalued. Under pressure from private banks, countries around the world have changed the laws that would allow them to copy what was done in Cypress. This is also called a “bail in.”